Aurcana Silver Corp V.AUN.H

Q& A from Jim Sinclair

[Banman17]

Hi Jim, First I want to thank you for providing me with the guiding light over the past 2 plus years. Without your input who knows if I would have had the staying power to hang in there on some of those days I pulled the rock over my head. I have had two burning questions for a while so I decided to ask the master. First, it seems as gold is hitting higher highs and higher lows but my portfolio is not following the same pattern. It seems when there is a correction of any sort the stocks go down but then are timid in their rise as gold hits new highs. An example is my portfolio is down 20% (with gold being 890) from its all time high when gold was trading at 845. Why is this and when do you see the pattern changing? My second question deals with the potential of the juniors. There seems to be a consensus that a vast majority of juniors will never make it to the mining stage. In fact I read yesterday where someone said the ratio is 1 in 1000. With where you see the price of gold going what kind of ratio do you see? Also, if they don't mine do they get sold and a larger entity takes them to mining or do they just fold up their tent? I know it would be just an opinion but I value it. Happy New Year and thanks so much again for all you do for us all. Regards, CIGA Ron Dear Ron, To answer your first question, this pattern was also evident in the 70s. The high in the gold shares was in 1980 on the recovery from $450 to $750, not at the $887.50 high. The why is the transition to understanding that precious and base metal shares are asset based entities. It takes significant inflation for that transition. It is coming. Good gold shares will benefit, don't worry. To answer your second question, the bottom line is that you have to have a combination of great properties and good people. Good people with no underlying assets are nice guys/gals going nowhere. Bad people with good properties is a break even situation at best. Good people with great properties are shots to the Moon as we move towards 2011. It seems there is an inverse relationship between insider options and high salaries and the level of ethics of management. There seems to be more of the first, less of the latter. All the best, Jim